Is Your Holiday Home Mortgage Broker on the Level?

by: SeanH
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Looking for a mortgage on your holiday home can seem complicated. You may have decided to consult a holiday home mortgage broker to help you through the process. However, this involves putting a huge amount of trust in the holiday home mortgage broker. How can you be sure your trust is justified?

Up till a few years ago, virtually anyone could set up as a mortgage broker. However in the last few years the profession has become much more regulated. You can now make sure that the holiday home mortgage broker you are dealing with is both qualified, and a registered member of the profession.

• All mortgage brokers must be authorised by the Financial Services Authority (FSA). When you first approach your holiday home mortgage broker, this is something you should check. You don’t need to take their word for it – you can go to the FSA web site (www.fsa.gov.uk) and look for them. It is of crucial importance that your holiday home mortgage broker is regulated. If you take advice from a broker who turns out not to be regulated, and you suffer loss as a result of the advice, you won’t be entitled to claim compensation.

• In addition, anyone who sells mortgages must have specific qualifications, i.e. they need to be CeMAP qualified (Certificate in Mortgage Advice and Practice). When you first go to see your holiday home mortgage broker, you should look for the certificate which should be on display. If it isn’t, you have every right to ask to see it. You should not under any circumstances deal with a broker who can’t demonstrate that they are qualified.

• You are also quite entitled to ask the holiday home mortgage broker to provide names of former clients as references. After all, you are going to be relying on them for advice in one of the biggest transactions of your life.

• If you are satisfied with the credentials of the holiday home mortgage broker and decide to proceed, the broker is required to provide you with an Initial Disclosure Document. This sets out exactly what services they provide, how much of the market they have access to (whole of market, a panel of lenders, or just their own lenders), and how they are paid, i.e. on a fee basis or commission basis.

Most brokers are nice friendly people and you may feel bad about appearing suspicious! But don’t! They are business people themselves and they certainly wouldn’t enter into a business transaction without checking up on the other party. Plus they make lots of checks on you! Once you are satisfied your holiday home mortgage broker is “on the level”, you can apply for your holiday home mortgage with peace of mind.

About the Author

Sean Horton is a Director of Holiday Let Mortgages who are a holiday homes mortgage broker.

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